Wheels India
Wheels India is a leading supplier of steel wheels for cars, commercial vehicles, tractors and mining/construction vehicles. Its numbers for Q1Fy14 have been disappointing. YoY, net sales dropped 12% and sequentially, it declined 3%. There was a larger ‘other income’ of Rs.3.12 crore and tax expense was also lower. Despite all this, it ended the quarter with a net profit of Rs.7 crore, down 22% (YoY) and up 40% (QoQ). The company’s equity is pretty small at Rs.9.87 crore. Reserves as at 31st March 2013 stood at Rs.249 crore.
This company does not seem to fall under the purview of SEBI’s minimum holding. As at 30th June 2013, promoters stake stood at 91.44%, in fact it has gone up from 85.62% at end of Q4FY13. Titan Europe holds 41.73% stake while the TVS group holds 49.71%. Floating stocks, which is non-institutional is only 8%. The company in Dec’12 had planned to revisit the capital market with an IPO of Rs.100 crore, 37 years after its first IPO in 1975 and this was also aimed at bringing down its holding to SEBI’s minimum threshold. It has not happened till date and maybe looking at the market conditions, it might go the QIP route. As of now, given the dismal state of the auto sector, Q2 does not look too enticing and there could be challenges ahead.